Steve Sinclair, Fairfax County, VEPGA
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Transcript Steve Sinclair, Fairfax County, VEPGA
Virginia Energy Purchasing
Governmental Association
(VEPGA) – A Model Example of
Good Governance of Taxpayer
Dollars
Steve Sinclair, Fairfax County
Chairman
VEPGA
What is VEPGA?
History
and Purpose
Profile
Functions
Benefits
Local Government History in Negotiating
Rates for Electricity Services
VA Code allows for negotiation of elec. rates
In 1950’s and 60’s electric contracts were rollover penny kWh
Energy Crisis hit in 1972-73
Electricity costs increased 100% to 200%
Local governments in Dominion’s (Virginia
Power) service territory formed rate negotiating
committee (Steering Committee) through
VML/VACO
APCO Steering Committee
VML/VACo Virginia Power Steering Committee,
1972 to 2002
Negotiated rates on basis of cost of service
Assessments (pro-rata) to raise funds to hire legal
counsel and consultants
Generally 3 year contracts
Able to develop rates and terms and conditions of
service that were lower cost and better met local
government’s needs than SCC tariffs
VA Passed Electric Deregulation in 1999
Rationale: competition would lead to lower rates
Transition period from 2002 to 2007 before competition
emerged
Rates could be capped as long as 2007
In anticipation of retail competition, VML/VACo steering
committee formed into a joint purchasing association in
2002
Able to purchase electricity cooperatively to obtain a better price
Local governments would have to delegate their buying authority
to joint purchasing association
Virtually every county, city and town are members
Virginia Energy Purchasing
Governmental Association - VEPGA
Established in 2002 as legal entity due to electric
competition
Ability to sign contracts for electricity services on behalf
of all local government members
Counties, cities, towns, schools, and other local
government entities
Board governs decisions
15 Board members elected from the membership
Board members serve staggered 3 year terms
Four meetings per year
Regional Coordination, Cooperation and Understanding
VEPGA Profile
Approx. 175 counties, cities, towns and authorities
Energy Load – 4,689 GWH
Dominion System – 81,144 GWH
5.8% of total Dominion System
VEPGA Electricity Usage –
5 year history
GWH Sales (@
meter)
Year
VEPGA
SYS
%
2013 4,688.90
81,144.20 5.8%
2012 4,688.50
79,760.50 5.9%
2011 4,760.10
81,415.40 5.8%
2010 4,852.20
84,072.10 5.8%
2009 4,739.20
80,574.10 5.9%
VEPGA Annual Electricity Costs
2013 approximately $400 million per year
Depending
on fuel costs
2011 contract with Dominion – 3.5 year
length
$1.4
billion contract
VEPGA Annual Expenses
Legal and consultant services varies from
$220,000 per year to $440,000 per year
Depending
on if in contract negotiation mode
1/1000 of a dollar per dollar expenditure on
electricity services
VEPGA
Legal and Admin. functions
Legal – Christian and Barton
Contract
negotiations and interpretation
Legislative/Regul. Monitoring/Education
Advice
Rate analysis
Meetings
Admin. Services - VML
Member
Auditing
services/dues assessment/billing
VEPGA
Consultant functions – Technical Assoc.
Fuel and rider audit
Develop projections of costs
Rate and schedule analysis
Cost of service analysis
Contract negotiations
Meetings and advice
Educational information
VEPGA Benefits – Lower Rates
VEPGA rates are on average approx. 4%
lower than rates set by the State
Corporation Commission
Savings of $16 million per year
Current 3.5 year contract - $56 million in
savings
VEPGA Benefits, cont.
Provides updates during the General
Assembly on energy bills
Educates localities on impacts of energy
laws and regulatory changes
Develop favorable Terms and Conditions
that reflects locality concerns
VEPGA Committees
Joint Action Committee
Meets
quarterly with Dominion
Addresses street lighting, construction,
relocation, maintenance issues that are not
able to be worked out locally
LED streetlights
Energy Efficiency Committee
Serves
as an educational and technical
resource to local governments
VEPGA Annual Meeting
April/May each year
Legislative/Regulatory/Contract updates
Discussion with members of emerging
issues:
Energy
Efficiency 2007
LED streetlights, GHG emissions inventories,
Portfolio Manager, power quality, future
energy issues, etc.
May 8, 2014 in Virginia Beach
Questions?